Franklin Electric Acquires Groundwater Distribution Companies

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Franklin Electric Acquires Groundwater Distribution Companies

Franklin Electric Co., Inc. announced that it has reached agreement to acquire controlling interests in three distributors in the U.S. professional groundwater market.

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Franklin Electric will acquire 2M Company Inc. of Billings, Montana; Western Hydro Holding Corporation of Hayward, California and Drillers Service, Inc. (DSI) of Hickory, North Carolina for approximately $89 million in the aggregate, which includes assumed debt.

The 2M and Western Hydro transactions have closed and the Company expects the DSI acquisition to close before the end of the second quarter 2017.

Gregg Sengstack, Franklin Electric’s Chairman and Chief Executive Officer, commented:

“The specialized groundwater distribution channel in the U.S. through which we sell our products is an important element in the ultimate sale, support and specification to the installing contractors. Working in partnership with our distributors, Franklin Electric has developed a broad array of products and systems solutions that will only grow as regulatory and efficiency demands increase in North America.

Over the last several years, Franklin Electric has worked closely with the management of these three companies and the leadership of other strategic distribution partners.

These relationships have provided us with insight into and appreciation for the value proposition offered by water systems distribution. By acquiring Western Hydro, 2M and DSI, including the stand-alone 2M/DSI joint venture, Franklin Electric is forward integrating into this channel with four strong, customer focused organizations competing in the market, increasing our commitment to the entire channel and the installing contractor base.

Our new distribution entity, with a national footprint of sixty locations and nearly 500 employees, will be the largest in the industry.”

Franklin Electric will operate the acquired distributors in an entity named Headwater Companies, LLC. The Company has named DeLancey W. Davis, a twenty-five-year industry veteran including the last eleven as an executive officer of Franklin Electric, as President of Headwater Companies, LLC. Mr. Davis will have overall leadership responsibility for the new Headwater Distribution segment and will begin to immediately integrate the three acquisitions into a single operating unit.

Read more: Franklin Electric

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